Michael McGrath (Cork South Central, Fianna Fail)
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On 24 April, the European Commission issued a letter of formal notice, citing what it considers incorrect transposition of the Fifth AML Directive by Ireland. This was one of the three notices issued on that date to Ireland on transposition matters across different Government Departments. On the Fifth AML Directive, the Commission contend that there was an incorrect transposition of the requirements for Ireland’s Central Register for the Beneficial Ownership of Trusts (CRBOT), which is operated by the Revenue Commissioners. The issues cited by the Commission relate to the mechanisms for accessing the information and for ensuring that the information filed is both accurate and complete.

The Central Register of Beneficial Ownership of Trusts (CRBOT) was established to help prevent money laundering and terrorist financing by improving transparency on who ultimately owns and controls Irish Trusts. Anti-Money Laundering (“AML”) legislation requires each EU Member State to establish such a Register. Revenue welcomes the acknowledgement by the Commission that this Register is operational and also appreciates their understanding that Trusts differ from legal entities in terms of the breadth of their structures and the fact that they do not all have filing obligations allowing easy identification as would be the case, for instance, in relation to companies covered by the Companies Registration Office.

The Department of Finance is already engaging on an ongoing basis with Revenue on a number of legislative changes to augment the powers of the Registrar to help improve compliance with the relevant obligations. In addition, Revenue undertakes compliance activity to increase registration levels. For example, in 2022/23, a campaign focused on Special Purpose Vehicles took place to increase registration in this sector. The total registration numbers have nearly doubled from the figure of 6,354 referenced in the Commission’s letter to 11,536 as of 31 March 2024. There are continued outreach and compliance activities to increase the numbers registered on the CRBOT in high-risk sectors.

Apart from officials of Competent Authorities and law enforcement Agencies, access to the Trusts Register was designed to facilitate ‘designated persons’ (i.e. designated financial and non-financial businesses and professions having anti-money laundering obligations) in carrying-out due diligence as part of their AML obligations. The system operates by providing access to the CRBOT Trusts Register through a token system. This minimises data protection risks, while enabling access to persons who need to have access under AML requirements. The data protection risks are significant given the prevalent use of Trusts in Ireland, often for low-risk activities, and the sensitivity of the data held. Access to the Register remains free to minimise the compliance costs on designated persons in carrying out their AML due diligence.

Ireland recognises the importance of an EU-wide harmonised approach in the fight against Money-Laundering and the Financing of Terrorism. Ireland continues to closely work with the Commission and our EU colleagues in this regard. The Department of Finance is actively engaging with Ireland’s Beneficial Ownership Registers, including working closely with the Revenue Commissioners and the Central Register for the Beneficial Ownership of Trusts, in supporting the strengthening of its powers through legislative changes to help the Register fulfil its mandate in line with EU law. Ireland is committed to fulfilling its EU AML requirements whilst protecting data as required under GDPR.